Toronto, October 3, 2005 - VenGrowth Funds today responded to the Ontario Government's announcement continuing the Ontario labour sponsored investment fund ("LSIF") tax credit until the 2011 RRSP taxation season.
"LSIFs play a significant and vital role in funding leading Ontario companies, and therefore we regret this Government's announced intention to eventually phase out the tax credits. Nevertheless, the transition period will allow time for government and industry to develop a venture capital policy that will ensure the continuity of supply of venture capital funding to the next generation of Ontario entrepreneurs," said David Ferguson, Managing General Partner, VenGrowth Private Equity Partners Inc. "We appreciate the consultative manner in which the Government has developed the transition plan over the last four weeks, and look forward to participating in further discussions about transitional details."
The province proposes to phase out the tax credit as follows:
|
Taxation Year
|
RSP Sales
Season
|
LSIF Tax
Credit
|
ROIF Tax
Credit
|
|
2005
|
2006
|
15%
|
20%
|
|
2006
|
2007
|
15%
|
20%
|
|
2007
|
2008
|
15%
|
20%
|
|
2008
|
2009
|
15%
|
20%
|
|
2009
|
2010
|
10%
|
TBD%*
|
|
2010
|
2011
|
5%
|
TBD%*
|
* The 5% incremental tax credit offered for ROIFs will be phased out on the same timetable as the LSIF tax credit, but the details will have to be determined.
The phasing out of tax credits does not affect the Federal Tax Credit that will still be offered to Ontario investors.
"This decision allows us to continue our focus on investing in growing Canadian companies to create value on behalf of our shareholders," added Mr. Ferguson. "With over $400 million in liquid assets, a later-stage investment focus, and a diversified fund raising platform, we believe that our shareholders remain ideally positioned to benefit from the long-term potential of the private equity asset class."
About VenGrowth Funds
A family of labour sponsored investment funds ("LSIFs"), the VenGrowth Funds invest in eligible small and medium sized Canadian companies in industry sectors that include technology, life sciences and traditional industries. Portfolio companies benefit from VenGrowth's substantial experience, resources, and hands-on investment style. The VenGrowth Funds had collective assets of over $1 billion and over 180,000 individual investors as of July 29, 2005.
About VenGrowth Private Equity Partners
With over $1.1 billion in assets under management, VenGrowth Private Equity Partners Inc. ("VenGrowth") is Canada's largest private equity and venture capital firm managing both retail and institutional assets. Since 1982, VenGrowth's accomplished private equity managers have invested over $1.1 billion in 180 companies, building a strong track record of successful portfolio transactions. These investments have been made on behalf of over 180,000 individual investors and leading pension funds, banks, insurance companies and family foundations. Portfolio companies benefit from VenGrowth's substantial experience, resources, and hands-on investment style. VenGrowth's offices are located in Toronto (Corporate Headquarters) and Ottawa. For more information, please visit www.vengrowth.com.
For further information:
Ed Dermit,
Vice President, Marketing
VenGrowth Asset Management Inc.,
(416) 628-9261,
edermit@vengrowth.com
